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Personal Investments • Re: 401k Advice- New to the game

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... They have 2 options, traditional and a Roth 401k. I lean toward Roth just because I would rather pay taxes now than later.
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What say you? Thank you!!
Welcome to the forum.

Making the Traditional versus Roth decision can be a bit more nuanced than just listening to your gut about paying taxes now versus later.

If you're in a 24% or higher Federal tax bracket with your earnings, then there's an argument to be made for using Traditional tax-deferred contributions now. The general idea is that you'll be deferring income taxes now at 24% and then paying income taxes much later at what could be a lower rate once you're in retirement and don't have all that wage income.

More details here: https://www.bogleheads.org/wiki/Traditional_versus_Roth

I agree with the idea of paying down the credit card debt as soon as possible.

Regards,

Statistics: Posted by retired@50 — Fri Jun 28, 2024 11:05 am



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